The Dangers of Dictating Procurement

The Dangers of Dictating Procurement
June 1, 2006

Steven Titch

Steven Titch is a policy analyst at Reason Foundation focusing on telecommunications, Internet and... (read full bio)

A Massachusetts directive that mandates use of an open source software format for electronic document storage marked a major victory for the open source movement. It remains to be seen, however, whether the order will benefit the state’s agencies and employees or save taxpayers money.

Unlike proprietary software, such as Microsoft Office, Intuit Quicken, and Adobe Illustrator, the authors of open source software have elected to waive collection of any copyright or license fee. Thus open source software can be acquired for free, sometimes with the simplicity of an Internet download. Open source's low-cost, communitarian nature has made it popular with the tech elite.

For several years, with the support of companies such as IBM, Sun, and Corel--companies that greatly benefit when large users choose open source alternatives--some IT users have been pushing for laws that require government agencies to consider open source software, if not demand its exclusive use.



Open Source Alternatives

Open source software can be a sound alternative to proprietary products. Linux has proved that in the business environment. The Mozilla Firefox browser, superior in many ways to Microsoft’s Internet Explorer, is perhaps the best example of open source software for consumers. On October 19, 2005, Firefox surpassed 100 million downloads worldwide.

At the same time, where there is product choice, especially in technology, informed evaluation is essential. One size rarely fits all. It’s dangerous for governments to legislate or dictate procurement decisions.

Last November, Peter J. Quinn, Massachusetts’ Chief Information Officer, ordered the use of Open Document Format (ODF), the format for documents, spreadsheets, and presentations used by OpenOffice.org, an open source competitor of Microsoft Office. The strengths and weaknesses of OpenOffice.org and Microsoft Office make for great debate in IT circles--a debate Quinn stifled with his sweeping mandate.

Quinn resigned in January, but Massachusetts remains committed to his policy. Starting in 2007, all documents created by the state, including all those posted on the state’s Web site, must be in ODF format. This is being done, we are told, to ensure “interoperability” across multiple software platforms and avoid vendor “lock-in,” principally to Microsoft Office.

There is, however, one big problem with this mandate: Very few users have bothered to download the free software to open and read ODF files. OpenOffice.org is not enjoying the reception Firefox has. This fact alone tells us PC users can discern degrees of value among open source alternatives.



Is Open Source Really Free?

In addition, as legislators in other states mull similar open source mandates, it helps to understand that the decision to use open source is more than proprietary vs. free. While Microsoft has a strategic interest in the choice of Windows and Microsoft Office, companies like IBM have a similar strategic interest in the choice of open source. The Massachusetts law tilts state procurement heavily toward vendors like IBM without any guarantee of savings or tangible user benefits.

IBM plays up the “free” aspect of open source as an alternative to costly Microsoft products. After all, who can vote against free? Lurking in the background is an important question: If companies like IBM are giving away software, where are they making money?

The answer is consulting services. IBM calls it “collaborative innovation”--it amounts to massive IT outsourcing. Massachusetts made a big deal about how its choice of ODF assures interoperability, but neither open standards nor open source by themselves guarantee interoperability.

While interoperability may be the aim, decentralized and diverse open source implementations create greater complexity within any IT organization. This in turn creates demand for the consulting and integration services companies like IBM provide.

In 2005, IBM’s IT consulting unit, IBM Global Services, accounted for $47.3 billion of the firm’s $91.1 billion in revenue. This segment of IBM’s business is growing the fastest, too, up 11 percent since 2003. Although IBM retains an image as a leading computer company, sales of IBM hardware are shrinking, down almost 14 percent (to $24.3 billion from $28.2 billion) over the same two years. Last year IBM sold its desktop PC business to China’s Lenovo.

The key procurement choice is whether the state’s IT organization will commit to a long-term product path with companies like Microsoft, or a long-term consulting path with companies like IBM. Both paths carry inherent costs, which may differ from department to department.

The sweeping, pre-emptive policy devised by the former Massachusetts CIO, unfortunately, prevented any of the state’s other IT decision-makers from making any long-term evaluation, and dangerously assumes the open source path will always be less expensive and more user-friendly.

IT officials in Massachusetts--along with the thousands of state employees who are being asked to implement and learn new software, not to mention the state’s taxpayers, who may get stuck with a huge IT consulting bill--may end up ruing this policy.


Steven Titch (titch@heartland.org) is senior fellow for IT and telecom policy at The Heartland Institute and managing editor of IT&T News.

Steven Titch

Steven Titch is a policy analyst at Reason Foundation focusing on telecommunications, Internet and... (read full bio)